No Coincidences? Similar experiences in financial software among developed and developing countries

We started a sharing good practices white paper series last month. This is part of our mandate, as a social enterprise, to share lessons learned in technology and good governance to the broad Public Financial Management (PFM) community. We published our latest good practice document to coincide with the upcoming East and South Africa Association of Accountants-General conference next week in Botswana.

The genesis for this good practice document is interesting. FreeBalance is a Canadian company based in Ottawa with a large installed base in the Canadian Federal Government. So, we have some insight into the complexities of public finances and human resources in a G8 country. Canada is considered to have one of the most advanced structures for governance in the world. And, our Canadian customers, thanks to the governance of “clusters”, have driven our products for almost 30 years.

Our mission has been to take our robust Government Resource Planning (GRP) software to less developed countries. Good governance, in my opinion, is not a “zero sum game.” It has a network effect in that improved governance in one country has positive effects in other countries.

The dark side of success?

In the course of events in the past decade, procurement cycles for government Integrated Financial Management Information Systems (IFMIS), as they are often called, were accelerated for post-conflict countries. The international community recognized that software and capacity building was necessary to rebuild government. And, FreeBalance software that was highly flexible for government, and only government with support for Canadian government requirements from decades past, gained a foothold.

The ultimate reward for success in fragile states – the only COTS vendor to have success under these difficult conditions – was an assumption that our software and expertise was only viable for “underdeveloped countries”. That’s certainly been the fallacy that major Enterprise Resource Planning (ERP) like to propagate.

There are some interesting observations that I have made from our on-going research into the PFM domain that may be of interest to you:

Many developing countries have leapfrogged developed countries particularly with the support for International standard, budget transparency and multiple year planning. Some might say that there is a double standard where donor countries and multilateral financial institutions expect better governance mechanisms in post-conflict countries than they support themselves.

The success rates for ERP software in government is meager. In very developed countries with high human capacity and good project methodologies. We encounter so many stories of ERP problems in government that we often fail to realize that ERP does not have a good track record in the private sector. The “enterprise” sector. It’s true that we update our ERP failure ERP Fail page as we learn about problems that have been reported publicly. We learn about far more failures and issues that are not reported. Which stands to reason – it is very embarrassing to country governments or IFIs to expose these problems.

The term “innovation” is frequently used in the enterprise software domain to the point where it’s lost all meaning. Vendors tout mobile technology yet the core of their software is client/server. They throw hardware (in-memory) to accelerate processing as if this hasn’t been done before by anyone. And, they continue to present the fiction that the larger the company then the lower the risk to customers.

Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.